Federated Co-operatives Limited (FCL), on behalf of local Co-ops in the Co-operative Retailing System (CRS), is investing $264 million to purchase 181 Husky retail fuel sites from certain wholly-owned subsidiaries of Cenovus Energy Inc. The purchase is subject to a customary regulatory review by the Canadian Competition Bureau and is not expected to close until mid-2022. This represents the largest retail acquisition in Co-op’s history.
The acquired fuel sites include gas bars, on-site car washes and convenience stores in locations across Western Canada. These new locations, most of which will be transferred to several independent local Co-ops across Western Canada, will strengthen Co-op’s presence in Western
Canada and bring their unmatched service and support to customers in new areas.
FCL said during a virtual news conference on Tuesday, November 30, that FCL partnered with Parkland Corporation to prepare a proposal for the acquisition.
“Given our complementary operations, we were able to put forward a competitive and compelling offer to Cenovus,” said FCL CEO Scott Banda on Tuesday. “By building on our network of gas bars, FCL can increase the use and capacity of the Co-op Refinery Complex in Regina and the Co-op Ethanol Complex near Belle Plaine, Sask.”
Some sites will be operated by local Co-ops while others will be operated by dealers, like our Tempo-branded service stations. Some of the sites may require remediation as they are reaching the end of their life cycle. FCL says they have excellent remediation processes and procedures in place. The need for site remediation was factored into the analysis and decision to purchase the sites.
There may be some corporate-level jobs transferred from Cenovus to FCL as a result of the acquisition; details of this will be determined in the future. However, Local Co-ops may begin operations immediately after the acquisition is completed, and the rebranding process from Husky to Co-op is expected to take about 18 months to complete.
“The nature of the CRS allows us to purchase assets on behalf of our members, which in turn, means we can be very competitive and cost-effective,” FCL CEO Banda said.
FCL CEO Banda says there are acquisition benefits from the purchase, FCL, local Co-ops, and the communities and members they serve will benefit in the following ways:
- Local Co-ops have the opportunity to grow and expand into new geographic areas and to increase their service offerings to their customers including access to fuel, and in some cases car washes and convenience stores.
- In the past number of months, FCL has announced initiatives to reduce its greenhouse gas emissions by 40 per cent below 2015 levels by 2030. FCL is also aspiring to achieve net-zero emissions by 2050. This investment puts FCL in a position to move forward with initiatives that take a leadership role in the transition to a low-carbon economy, including carbon capture and renewable diesel production.
- The expansion of Co-op’s retail network also advances the production at the Co-op Refinery Complex and the Co-op Ethanol Complex, along with the important economic contribution these facilities provide to the CRS and local communities across Western Canada.
- Local Co-op associations are owned by their members. Over the past five years, Co-op returned more than $2.3 billion in patronage allocations to its members.
“This is money that goes back into our communities. That is, and will continue to be, the strength of the Co-operative Retailing System,” FCL CEO Banda said. “We are a different kind of business – we are locally invested, community-minded and offer lifetime membership benefits, including patronage refunds, quality products, quality service and fair prices.”
To learn more about Federated Co-operatives Limited, click here.